Third Point founder Daniel Loeb is entering the reinsurance business, he told his hedge fund's investors in a letter.
Loeb has set up Third Point Re in Bermuda and hired John Berger as its chief investment officer. The new company will provide permanent capital for the Third Point hedge fund, Loeb wrote to investors yesterday.
The new reinsurer has already raised about $500 million from Loeb, Berger, insurance executives, and private equity firms Kelso & Co. and Pine Brook Road Partners, Bloomberg News reports. Third Point Re hopes to raise another $250 million to $500 million more.
"We believe that the combination of Third Point's longstanding exceptional asset management returns, Mr. Berger's standout underwriting track record, and a reinsurance market that may improve following multiple events in the past 12 months make it a promising time to launch Third Point Re," Loeb wrote.
Third Point sent the letter after Berger's former employer, Alterra Capital Holdings, blew the lid on Third Point Re in a regulatory filing announcing Berger's resignation to join Third Point Re. Berger was CEO of Alterra's reinsurance business. He is also the former president and founder of Chubb Re.
Third Point's entry into the reinsurance business follows that of Loeb friend David Einhorn, whose Greenlight Capital launched its own reinsurer, which invests its premiums in the hedge fund, in 2004.